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National Association of Realtors: Expect a More Modest Market in 2016

NAR: Expect a More Modest Market in 2016

From: DAILY REAL ESTATE NEWS

In 2015, the housing market reached its best year in nearly a decade, but 2016 will likely see a slowdown in many housing markets across the country. Home sales are forecasted to increase this year, but at a more moderate pace, “as pent-up demand combats affordability pressures and meager economic growth,” says Lawrence Yun, chief economist for the National Association of REALTORS®.

Yun says pent-up demand, sustained job growth, and improving inventory conditions will be the main triggers pushing the expected gains in new and existing-home sales this year.

However, Yun cites rising mortgage rates, home prices that still outpace wage growth, and a fragile global economy as the main challenges that could hold back a stronger pace of sales this year.

“This year, the housing market may only squeak out 1 to 3 percent growth in sales because of slower economic expansion and rising mortgage rates,” Yun says in a new video released highlighting his expectations for the housing market in 2016. “Furthermore, the continued rise in home prices will occur due to the fact that we will again encounter housing shortages in many markets because of the cumulative effect of homebuilders under producing for multiple years. Once the spring buying season begins, we’ll begin to feel that again.”

Yun, still crunching the final month of data for 2015, expects that existing-home sales will finish the year up 6.5 percent from 2014. That marks the highest since 2006 but is about 25 percent below the prior peak set in 2005 (5.26 million sales estimated in 2015 compared to 7.08 million in 2005).

Home prices were also up. The national median home price for existing homes is expected to near $221,200 for 2015 — about 6 percent higher than 2014. In 2016, existing-home sale prices are projected to rise between 5 and 6 percent, Yun notes.

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Sabrina Caton - The Caton Team Realtors

Sabrina is a native Californian born and raised in the Silicon Valley with a passion for Residential Real Estate. Partnered with her mother-in-law Susan - they are The Caton Team. With over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time. Call | Text at: 650-799-4333 | Email Info@TheCatonTeam.com
The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true. The Peninsula is our backyard - let us help make it yours. We represent Buyer’s and Seller’s throughout the Bay Area.
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